2 Recent IPOs to Buy on the Dip

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Following the market bottom, tech and growth stocks were in vogue as these companies benefitted from the decline in longer-term rates, the Fed’s ultra-dovish policies and the increase in tech spending as people were spending more time online and working from home. Of course, the majority of IPOs can be classified as growth stocks, and technology accounted for the majority of new issues in 2020. The shutdowns and stimulus payments also led to many people taking an interest in trading stocks. Many ended up buying more speculative stocks including IPOs.

This year, the economy’s gradual reopening and strength in longer-term rates led to the unwind of these catalysts, so it’s not surprising that IPOs have underperformed. However, some are attractively priced and have considerable upside. Further, the recent drop in longer-term rates should also be supportive of IPOs in the coming months. Therefore, investors should consider buying the following IPOs on the dip: ZIM Integrated Shipping Services Ltd. (ZIM) and ZipRecruiter (ZIP).

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